Knowing the facts revealed in God of War III, the act of Zeus helping Kratos was probably because of him being oblivious that anyone would actually succeed in opening Pandora's Box . If anything, Zeus might have thought its power would be used by Kratos without actually releasing the evils sealed within. Furthermore, during that time, Zeus probably never fully realised the threat Kratos would pose, thus helping him in a moment which would otherwise have resulted in Kratos' certain death.
It is also possible that Zeus and the other gods feared Ares' increasing belligerence, and thus they positioned Kratos to succeed in destroying Ares, but Zeus remained in disguise to avoid being discovered - and thus avoided a potential war between the gods.
Ghost of Sparta
The Grave Digger reappears in Ghost of Sparta. Kratos first encounters him as he makes his way through the city of Heraklion. There, the Grave Digger addresses Kratos, and advises him to turn back now and give up his quest. Determined to find Deimos, Kratos ignores the advice, and continues on. After his victory over Thanatos, Kratos carries the dead body of Deimos up the Path of Solitude, to the peak of Suicide Bluffs. There, he once again finds the Grave Digger waiting for him. He shows Kratos a freshly dug grave, in which Kratos places Deimos to be buried. Kratos stood at edge of the bluffs, and asked of no one in particular "By the Gods, what have I become?". In answer, the Grave Digger replied "Death. The Destroyer...of Worlds,", before he disappeared.
After Kratos had left the Bluffs, and returned to Olympus, the Grave Digger appears once more, this time carrying the dead body of Callisto. He lays her in another grave, however, between the graves of both Deimos and Callisto, is a third grave that is currently empty. To this, the Grave Digger simply says that now "only one remains", refering to Kratos.
After unlocking all other items in the Temple of Zeus, players can obtain the Grave Digger's Shovel, which allows them to use the Grave Digger costume in the Combat Arena. While the costume showed in the arena settings menu is the Grave Digger (giving the impression that the decrepit old man is a playable character), the actual match starts with him plunging the shovel into the ground, conjuring a large thunderbolt on himself, revealing his true form. His character model seems to be the same as the one from God of War II, evidenced by his stance and attacks wielding the Blade of Olympus. He also uses the Gauntlet that was acquired by Kratos in Chains of Olympus.